Sharechat Logo

Aquarius Platinum

By Dan Stratful

Friday 24th February 2012

Text too small?

Aquarius Platinum (ASX: AQP) is a risky share at the best of times, and it appears to be facing too many headwinds. Adding to this is its sovereign risk, or the operation of its mines in risky countries, particularly Zimbabwe.

AQP produces platinum group metals (PGMs) with assets on both the Bushveld Complex in South Africa and the Great Dyke in Zimbabwe, two of the most renowned PGM bearing deposits in the world.

AQP is the world’s fourth largest primary platinum producer, and its operations include four operating, mechanised low-cost producing mines, two retreatment facilities and one non-operating mine with an active exploration programme underway at and around existing AQP operations.

AQP’s attributable production for the second quarter ending 31 December 2011 (2Q) decreased by 4% quarter-on-quarter while average PGM dollar prices deteriorated with platinum and palladium falling 14% and 17% respectively and rhodium falling 16%.

The December quarter was tough and AQP reported that the entire platinum industry is facing challenges from all angles.

It reported that the region’s platinum industry is facing difficult trading conditions and that these should not be underestimated, hardly the type of news shareholders like to hear.

PGM margins remain low in both Rand and Dollar terms, oversupply issues and a poor economic outlook all provide a negative outlook, while cost and regulatory pressures also continue unabated.

AQP also reported increased stoppages and the continued underperformance by the lead mining contractor during the 2Q, which has led it to review its contractual relationship with the lead miner.

Status: SELL

AQP’s shares today traded at $2.19

For portfolio, sharemarket and fixed income enquires contact:
Dan Stratful at Investment Research Group (IRG)
Authorised Financial Adviser (AFA)
0800 437 8489, 09 304 0232,
**A disclosure statement is available, on request and free of charge.

In accordance with the Financial Advisers Act 2008 (“the Act”) Sharechat is “Class Advice” and any advice or recommendations contained on this webpage is not “Personalised Advice” as defined by the Act. This means Sharechat does not take into account an investor’s particular financial position, financial needs, financial goals, risk profile or asset allocation. Investor’s who require “Personalised Advice” should contact an Authorised Financial Adviser (AFA).

DISCLAIMER: To the extent that any of the content above constitutes advice, it is general advice that has been prepared without reference to investor’s objectives, financial situation or needs. Before acting on any advice, investors should consider the appropriateness of the advice and IRG recommend that investors should obtain appropriate financial, legal and taxation advice before making any financial investment decision. The report is based on information compiled from public information and private research. IRG have completed the report on a best endeavours basis and do not accept any liability of loss or damage. IRG suggest that clients use this as part of a decision making process and check key data before making any investment decisions.
Employees may have an interest in the securities discussed in this report.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar rises as US-China trade, Brexit tensions ease
SkyCity shares hit 7-week low as fire encapsulates convention centre
Wrightson showcases Fruitfed Supplies as horticulture stands out
Fonterra rivals fear dairy giant will get leg up from law overhaul
Wellington Drive remains in the black as it raises operating forecast
OMV plans further maintenance at Pohokura
Sky continues sports drive with extension to netball rights
Apple's asset-shuffling puts $270m value on PowerbyProxi
Fonterra lifts payout forecast on improving global dairy prices
22nd October 2019 Morning Report

IRG See IRG research reports